India is significantly ramping up its defence spending over the next decade, aiming to counter a potential two-front conflict with China and Pakistan while bolstering its position on the global stage.
According to GlobalData, a leading data and analytics company, India's total defence spending, including pensions, is projected to reach a staggering $415.9 billion between 2025 and 2029, representing a compound annual growth rate (CAGR) of 3.7%.
This surge in expenditure is driven by India's need to modernize its military and reduce its reliance on imports. GlobalData's latest report, "India Defence Market Size, Trends, Budget Allocation, Regulations, Acquisitions, Competitive Landscape and Forecast to 2029," highlights that India has already spent $93.6 billion on defence acquisitions between 2020 and 2024. This includes a range of indigenous and imported platforms such as nuclear-powered attack submarines, Nilgiri-class frigates, Rafale multirole aircraft, Tejas Mark 1A multirole aircraft, Prachand helicopters, and Zorawar main battle tanks.
"The increase in India's acquisition budget is largely attributed to the procurement of both indigenous and imported military platforms," says Akash Pratim Debbarma, Aerospace & Defence Analyst at GlobalData. He emphasizes that India's strong economic growth has played a key role in enabling this increased defence spending.
This focus on modernization has also fueled the growth of India's domestic defenceindustry. Private sector companies like Tata Advanced Systems, Bharat Forge, L&T Defence, and Adani Defence and Aerospace are playing an increasingly important role in fulfilling the needs of the Indian Armed Forces. GlobalData predicts that India will spend approximately $93.5 billion on procuring indigenous military platforms between 2024 and 2029.
The expanding presence of the Chinese People's Liberation Army Navy (PLAN) in the Indian Ocean Region is a particular concern for India. This has led to a renewed focus on enhancing the Indian Navy's capabilities, particularly in blue-water operations.
India's recent allocation of funds to build six nuclear-powered attack submarines (SSN) underscores this commitment. These submarines will not only protect India's territorial waters and its fleet of nuclear-powered ballistic missile submarines (SSBN) but also act as a deterrent against China's growing influence in the Indo-Pacific.
Despite recent efforts to de-escalate tensions with China, such as the border disengagement agreement reached during the 16th BRICS summit in October 2024, India remains wary.
"Skepticism towards China, especially after the deadly skirmishes of Galwan Valley in May 2020, will compel India to maintain the preparedness levels of its armed services, which in turn will drive the country's defence budget over the next decade," concludes Debbarma.
